Senators voice concerns over CAFTA
By JIM ABRAMS
13 April 2005
ASSOCIATED PRESS WRITER
WASHINGTON — The administration’s proposed free trade agreement with Central American nations was met with a barrage of objections from senators Wednesday, signaling a hard road ahead.
Tough questions about the Central American Free Trade Agreement came from both free-trade Democrats and Republicans whose support the administration needs for the pact with Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua.
Sen. Kent Conrad, D-N.D., said the agreement would destroy U.S. sugar, saying, "You’ve just negotiated away another industry." Sen. Craig Thomas, R-Wyo., meanwhile, warned increased CAFTA sugar exports could set a precedent for future trade deals with Argentina and Brazil.
The Senate Finance Committee’s top Democrat, Max Baucus of Montana, generally backs trade pacts, but he expressed concern for his state’s beet growers and urged the White House to do much more to promote the agreement to a skeptical Congress.
"Without presidential leadership, this agreement is going to face a very steep uphill battle," he told acting U.S. Trade Representative Peter Allgeier at this year’s first congressional hearing on CAFTA.
Montana’s lone congressman - Republican Rep. Dennis Rehberg, a potential challenger to Baucus in 2008 - opposes the pact because of its potential harm to the sugar industry.
Allgeier strongly defended the deal, citing estimates that it would nearly double current U.S. agriculture exports to the region, to about $3 billion a year. While almost all goods from the six nations now enter the United States duty free, CAFTA would result in 80 percent of U.S. industrial exports and more than half of farm exports becoming duty-free immediately.
Finance Committee Chairman Charles Grassley, R-Iowa, supported the pact, saying a vote against CAFTA was "a vote to maintain unilateral trade and keep tariff barriers to our exports high. It’s a vote that defies logic."
He gave the example of a Caterpillar off-road loader, saying that under CAFTA, the tariff on its export to Costa Rica would go from 14 percent, or $140,000, to zero.
A House International Relations Committee panel on Wednesday also took up CAFTA in the context of the effects of the North American Free Trade Agreement with Canada and Mexico enacted a decade ago and the possibilities of an Andean and a hemisphere-wide free trade zone.
AFL-CIO executive vice president Linda Chavez Thompson called for the rejection of CAFTA, saying that under NAFTA "real wages in Mexico have fallen, the number of poor people has grown, and the number of people migrating to the United States to seek work has doubled."
Rep. Kevin Brady, R-Texas, the GOP’s point man on CAFTA, contended that the agreement was "a statement that the United States will continue to be a strong partner in encouraging economic growth and the spread of democracy in the Western Hemisphere."
GOP leaders have said they hope the House will vote on the measure in May. A Senate vote would follow that.
Other senators cited a list of concerns: James Jeffords, I-Vt., questioned provisions on labor rights and environmental standards while Sen. Olympia Snowe, R-Maine, spoke of the lack of enforcement of past trade pacts: "I’ve lost confidence in the ability of our government to enforce these agreements."
Oregon’s Democratic senator, Ron Wyden, criticized CAFTA provisions that he said protected the exclusivity of U.S. pharmaceutical industry drugs. "I’m one of the people you’ve got to get to have any chance of passing" the bill, he said, but given the "egregious favoritism" to special interests, "you’ve got a long ways to go to convince me."
Allgeier stressed that under CAFTA, imports from Central America and the Dominican Republic, even after 15 years, would amount to only about 1.7 percent of U.S. consumption.
The U.S. textile industry, meanwhile, would benefit because the pact would help producers in CAFTA countries that use U.S. yarn and fabric in their goods, Allgeier said. A T-shirt made in Honduras is likely to contain more than 50 percent U.S. content, while a T-shirt made in China has little if any U.S. content.